I just returned from Greece, where I witnessed firsthand last week’s bank closures and its impact on local entrepreneurs. This crisis stimulated me to ask: how did Greece–the foundation of Western civilization—lose its capacity to innovate?
While Greece has a significant number of entrepreneurs (average for the European Union, according to the Global Entrepreneurship Monitor), too many of these businesspeople focus on un-innovative products and services. For example, George lives and works in a mountain village on a small island. Trained as a barber, George has cobbled together a small business empire consisting of a local barber shop and two shops selling locally produced (and highly regarded) knitwear and traditional products, such as honey and ceramics. Nikos runs his family’s taverna, which attracts a very loyal following of foreign and local clients. Nikos, his mother, and brother work eighteen hour days during the summer, which enables them to support a middle class lifestyle in Athens during the rest of the year. Neither George nor Nikos have innovative and scalable products and services that have the capacity to disrupt old markets or create new ones. What they do, they do very well. But that is it.
Some scholars suggest that the Greek culture of uncertainty avoidance may be the cause of its lack of innovation. Yet, Greeks are noted for their willingness to break rules, which can result in uncertainty generation. Moreover, there are likely to be other causes of Greece’s loss of innovative capacity. While Greeks maintain a high level of creativity (an antecedent of innovation) and are recognized as astute businesspeople (another antecedent), they have not been able to build a significant number of globally competitive, game changing firms so far. An even more interesting set of questions is: how did Greece lose this capacity over time, and can it be recovered? What can Greeks learn from others who have lost–and then recovered–their innovative capacity?
Answering these kinds of questions seems central to solving the Greek economic and financial crisis.
David Lingelbach is an assistant professor of entrepreneurship in the Merrick School of Business at the University of Baltimore.